Stock Pick

  • Zoom Says China Asked It to Censor Pro-Democracy Activists

    Zoom Says China Asked It to Censor Pro-Democracy Activists(Bloomberg) — Zoom Video Communications Inc. said it deactivated accounts of pro-democracy Chinese activists based in the U.S. at the request of China, intensifying concerns that Beijing is extending its censorship clout globally.Chinese officials reached out to Zoom in May and early June about four videoconference calls that were publicized on social media to commemorate Tiananmen Square protests, the San Jose, California-based company said Thursday in a blog post. Zoom said that China “demanded” the company terminate the meetings and host accounts because of the activity, which it deemed illegal.Zoom said that at least three of the four meetings contained participants from mainland China, and it made the decision to end three of the meetings and terminate the associated accounts, two in the U.S. and one belonging to an activist in Hong Kong. “Going forward Zoom will not allow requests from the Chinese government to impact anyone outside of mainland China,” the company said.Zoom announced Wednesday it had reinstated the closed U.S. accounts, and said it was working on technology that could prevent participants from specific countries from joining calls that were deemed illegal in those areas. The company will also outline a new policy to address these types on requests on June 30.Beijing employs some of the strictest internet controls in the world, rooting out content and blocking websites it deems a threat to stability. It has scaled up the level of censorship in the years since President Xi Jinping came to power, expanding controls on social media, requiring real-name registration of accounts, criminalizing the spread of rumors and punishing influential commentators with millions of followers.While China’s Great Firewall blocks access to internet sites such as Google, Facebook and Twitter, more of its 1.4 billion citizens are turning to home-grown alternatives such as WeChat and Weibo to express their discontent. Controls have become even more stringent this year, after the coronavirus outbreak unleashed a rare outpouring of criticism of China’s government. Internet controls also typically intensify ahead of major political events or other dates deemed sensitive such as the June 4 anniversary of the deadly student protests in 1989.‘Consider the Consequences’Now the fear is that China is increasingly bringing its desire to control internet activities beyond its borders to control its citizens and corporations. For companies that want to conduct business in China, the message is clear: Actions that harm China’s interests have implications. Wang Sixin, a professor at the Communication University of China, said tech companies that have operations in China and rely on its market will “need to respect China’s laws, ethics, political correctness and local people’s feeling.” For Zoom, that also applies, regardless of where the virtual meeting takes place, he said.“China, after all, has a huge market, and we now have measures to counter such actions that are harmful to China,” Wang said. “This is not to say we’re using the market size to bully them. But the companies need to consider the consequences of their actions.”“Google, Facebook and Twitter all have hurt Chinese people deeply in the past, and they are still doing that during the pandemic, limiting accounts of Chinese diplomats, and China has kept a record of them,” he added. “They can do what they like, but there would be consequences when they or their related businesses want to expand in China.”In another move that came to light Thursday, Apple Inc. removed two podcast applications from its App Store at the request of the Chinese government. Google pulled its search engine from mainland China in 2010, citing security and censorship concerns. A Google project to create a censored search service for the country, called Dragonfly, was killed last year after protests from employees and U.S. politicians.‘Pick a Side’Zoom, which maintains a significant research-and-development workforce in China, is now in the middle of the clash between free speech and government censorship that has confronted other U.S.-based technology companies doing business, or trying to conduct business, in China. Chief Executive Officer Eric Yuan was born in China, but is a U.S. citizen.The company’s actions stoked worries that the tech company, which has risen to prominence while millions have been stuck at home during the pandemic, was too close to Chinese authorities who have sought to censor images and content about the 1989 protests and resulting massacre in Beijing. The event is a seminal moment for advocates of democracy in China.U.S. Senator Josh Hawley, a Republican from Missouri, wrote Yuan Thursday, stating that Zoom was not the first U.S. company to censor users in order to do business in China, but in the end, the Chinese Communist Party would benefit more than the appmaker.“It is time for you to pick a side: American principles and free speech, or short-term global profits and censorship,” he wrote.Universities, big corporations and other users of Zoom during the pandemic will need to consider how much information the company is collecting and whether there is “any bad faith activity with that information after its been captured and collected,” said Michael Norris, Shanghai-based analyst with AgencyChina. “All of this reinforces the extraterritoriality of China’s censorship apparatus.” (Updates with context on China censorship in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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  • 3 ASX shares I’d buy if the market hits 23 March levels again

    calendar with 23 March highlighted

    23 March 2020.

    That’s the day the S&P/ASX 200 Index (ASX: XJO) found its bottom for the year so far. On that fateful day, the ASX 200 descended below 4,500 points before finishing the day at 4,546. That’s a long way from the levels we see today (even after the savage sell-off). But this dip was so quick if you blinked, you probably would have missed it. The next trading day, shares were back up and the rest is, as they say, history.

    But sometimes history repeats itself – or at least rhymes.

    So if we do see an ASX 200 back at the levels we saw on 23 March, I will be buying shares, no question. But which ones? Well, these 3 are on my wishlist for the prices they were offering 2½ months ago.

    Afterpay Ltd (ASX: APT)

    Afterpay hit the unbelievable share price of $8.90 on 23 March – a lightyear away from its current share price of over $50. Yep, that’s right, anyone who won the lottery by buying Afterpay on this date would be sitting on an almost 500% gain today. That’s not bad for a couple of months’ work. I think this company is one of the most exciting and disruptive companies on the ASX (and maybe even in the world). If the Afterpay share price got back to single digits, I wouldn’t hesitate to back up the truck.

    WAM Research Limited (ASX: WAX)

    I love locking in a solid dividend yield, and WAM Research is known for exactly that. On current prices, this company is offering a hefty 7% dividend yield, complete with full franking credits. However, WAM Research dipped to around 94 cents per share on 23 March – which would have enabled a lucky investor to lock in the far more preferable yield of 10.4%. That’s a yield I couldn’t say no to, and so WAM Research shares will be at the top of my watchlist if the ASX dips once again.

    Newcrest Mining Limited (ASX: NCM)

    Newcrest is the ASX’s largest gold miner and a great way to get some indirect exposure to gold through ASX shares in my view. I think there is a strong bull case for the yellow metal over the coming years. With central banks around the world lowering rates to zero and printing massive amounts of money to counter the economic effects of the coronavirus, I think there will be a high demand for tangible (and unprintable) assets like gold in the years to come.

    On 23 March, Newcrest shares dipped down to $21.06. Given that they’re over $30 today, I think it would have been a great move to pick up some Newcrest shares then. It’s a mistake I won’t make again if the ASX gets back to 23 March levels.

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    3 “Double Down” stocks to ride the bull market higher

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    Sebastian Bowen owns shares of Newcrest Mining Limited and WAM Research Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post 3 ASX shares I’d buy if the market hits 23 March levels again appeared first on Motley Fool Australia.

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  • Why the Lovisa share price is at risk of falling further over the coming weeks

    Lovisa shares

    The Lovisa Holdings Ltd (ASX: LOV) share price tumbled on Friday along with its peers, but the costume jewellery retailer may continue to lag ahead of its profit results in August.

    This is the prediction from Morgan Stanley who’s warning that there is a 70% to 80% chance the Lovisa share price will fall over the next 60 days.

    The bearish prediction stands in contrast to the recent re-rating of ASX retail stocks as Australia emerges from the COVID-19 shutdown.

    Retail re-rating

    Some retailers like JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN) have benefitted from increased demand for IT equipment and electronics from stuck-at-home consumers.

    Meanwhile, other retailers like Baby Bunting Group Ltd (ASX: BBN) and Kathmandu Holdings Ltd (ASX: KMD) have experienced a spike in online sales.

    The sector also got a boost on news that the economic fallout from the coronavirus pandemic isn’t half as bad as what experts were predicting.

    Left behind

    But Lovisa may be among the worst placed retailers to benefit from these tailwinds. Morgan Stanley sees near-term risk to its share price as its store rollout in the US, UK and France may take six to 12 months to ramp up again.

    This is significant as new store openings in those key markets are a major earnings driver for the group.

    But these countries are having more trouble than Australia in flattening the coronavirus curve. The US may be particularly hard hit on fears of a second wave of infections as the number of Americans catching the virus surpassed two million.

    All glammed up and nowhere to go

    This may not be the only thing to weigh on Lovisa’s share price. Morgan Stanley doesn’t think the small cap retailer will benefit so much from the rebound in consumer spending in Australia.

    The reason is social events like weddings are a big driver for jewellery demand and there are still strict limits on the number of people who can attend such gatherings.

    Disconnected from online sales

    Finally, Lovisa may not benefit significantly from the big shift to online shopping because the company doesn’t have a strong presence in this channel, explained Morgan Stanley.

    If the broker is right, the company’s full year result announcement in August may be a sombre affair!

    Morgan Stanley’s recommendation on Lovisa is “equal weight” (equivalent to a “hold”) and its price target on the stock is $6.50 a share.

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    Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Why the Lovisa share price is at risk of falling further over the coming weeks appeared first on Motley Fool Australia.

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